A business owner who sells a company, an executive who exercises stock options, or a lawyer with an unusually high year may owe it even if that income spike is not repeated.
But as a revenue measure, the tax has worked.
Massachusetts officials originally treated the new money cautiously. That was sensible. High-income tax revenue is volatile. Capital gains rise and fall with markets. Business sales bunch into particular years. Bonuses, stock compensation, and pass-through income follow the economy.
Even so, the first full year of collections was striking. The state’s own budget documents reported approximately $2.46 billion in Fair Share revenue in fiscal year 2024 and $2.702 billion across fiscal years 2023 and 2024. For fiscal year 2026, budget writers set the consensus estimate for surtax revenue at $2.4 billion.
That is not a rounding error. It is enough money to become part of the state’s governing architecture: early education, school meals, transportation, higher education, road and bridge work, and transit support.
This does not prove that every dollar was spent wisely. It does not prove that the tax has no cost. But it proves something important: the state did not pass a symbolic tax. It found a large revenue source.
The migration evidence is weaker
The migration claim is more complicated.
The strongest case against the surtax comes from outmigration data. The Pioneer Institute, a Massachusetts-based free-market research group, argues that IRS migration data show the state lost $4.18 billion in net adjusted gross income to other states in 2023. It says Florida and New Hampshire alone accounted for $2.75 billion of that loss. Pioneer treats this as evidence of a worsening “tax flight” problem following the 4 percent surtax.
That is evidence worth taking seriously. Massachusetts is a high-cost state. It competes with no-income-tax Florida and nearby New Hampshire. It also has an estate tax, high housing costs, and an economic base that includes many people with the means to move.
But the same IRS data can be read less dramatically. MassBudget, a progressive policy group that supported the surtax, argues that net household departures fell in the newer IRS data compared with the prior year. It also notes that the overwhelming majority of households leaving Massachusetts reported incomes below $200,000, the highest income category separately available in the public migration data.
That limitation is not a small technicality. The public IRS migration tables do not cleanly identify households earning more than $1 million. They can show people moving. They can show adjusted gross income moving. They cannot, by themselves, prove that the surtax caused a large number of million-dollar earners to leave.
This is the evidentiary gap in the political argument. Opponents can point to money leaving Massachusetts. Supporters can point to large surtax collections and the continued presence of high-income residents. Neither side can yet close the causation question with public migration data alone.